PHILADELPHIA (CBS) — Economist Chris Butler, of Butler Lans & Wagler, told Talk Radio 1210 WPHT morning host Chris Stigall that if he was Brian Roberts (Chairman and CEO of Comcast), he would “not be that disappointed” by the cancellation of the merger between Comcast and Time Warner.
“If you looked at what the stock did yesterday upon this announcement, it actually went up, and I think it’s because shareholders feel like the future of content delivery, if I can speak so broadly, is not really cable. It is other things, and this frees up cash for Comcast to go after those other things, and I think that’s probably what will be talked about in the executive washroom this morning.”
The Federal Communications Commission (FCC) was certainly not disappointed today, seeing that more than one commissioner had come out against the merger, says Butler.
“I think what the FCC is going off of is the fact that the merger would have resulted in the end company being responsible for about 57% of all broadband activity, which is apparently way too high for the FCC’s liking, but…it’s not a foregone conclusion that that newer company could not have delivered a better product for cheaper, it’s just that the FCC doubts that that would have been the case. The reason that they did it is to get the economies of scale. Those economies of scale could pay off for the consumer. The question is simply, would it?”
Butler feels that, overall, Comcast is not upset about the deal falling through, and that’s evident by how the company handled it.
“They kind of bailed on this a little early, don’t you think?…Maybe they saw the writing on the wall and said, ’why spend another day and spending money and time on this thing on when quite honestly the future can be somewhere else other than cable?’”